Amid competitive pressure, American elevates its customer experience

Travel Weekly

3 days ago

With a slew of initiatives announced this year, American Airlines is beefing up its customer service to better compete for premium travelers.
Analysts, however, want to see if American will have the wherewithal long-term to match what Delta and United are doing.
American's new emphasis on improving the customer service in all cabins was articulated in May by chief customer officer Heather Garboden for an airing of American's podcast, "Tell Me Why."
Running a reliable operation, Garboden said, has been the primary focus in customer service for airlines during most of her 20-plus-year career. But no longer.
"In today's environment, that's table stakes," she said. "We know that customers expect more. We know that premium has become incredibly important."
The Flagship Suites in the business class on American's Boeing 787s. Photo Credit: American Airlines
This spring, American took delivery of its first planes (Boeing 787s) equipped with sliding-door business-class suites. In May, the carrier also opened a Flagship Lounge and a new Admirals Club in Philadelphia's airport. But those moves, while substantial, were long in the works.
Evidence of American's new emphasis on customer offerings manifested in February, when the airline created a standalone customer-experience organization and put Garboden in charge.
Since then, announcements related to customer experience have come fast and furious.
Photo Credit: American Airlines
Among many others, they've included in-flight service items such as expanding buy-onboard meal options in economy, adding a second beverage service for domestic flights of more than 1,500 miles, and introducing afternoon tea service across cabins on inbound flights from Paris and London.
American also made customer-favoring policy tweaks, including expanding same-day standby eligibility to all customers (not just AAdvantage members) and enabling standby requests to be made with an agent rather than only through automation.
In April, American unveiled a redesigned app and announced that it will make WiFi free to AAdvantage members across 90% of its fleet beginning in January. And last month, American announced plans for a new Flagship Lounge and Admirals Club in Miami.
View from the Wing blog author Gary Leff said lots of nice things are happening at American.
"There's a drive to win on something other than price," he said. "They want corporate business. They want premium business."
Photo Credit: American Airlines
Brad Beakley, CEO of travel industry consultancy Hospitio, said he's already enjoyed some of the service upgrades on American flights, including the steak and pimento cheese sandwich on the expanded buy-onboard menu. The sandwich was delicious, Beakley said, but availability has been inconsistent.
"The execution of all these things matter, and I think that's something American struggles with," Beakley said. "I don't know if that's the culture or employee organization. I think some of it is logistics."
But Beakley said that American's appointment of former Walmart supply chain and logistics executive Chris Sultemeier to its recently created Customer Experience Advisory Board is another positive sign.
Beakley views American's sharper focus on customer experience as related to the airline's re-engagement with corporate travel agencies and their customers last year, after a failed strategy of driving more direct and New Distribution Capability (NDC) bookings, in part by removing more than half of its traditional ticket content from the GDSs. It resulted in a substantial loss of corporate share.
Leff said that American, like its full-service competitors, has a high cost structure. So to succeed, it needs to operate with a revenue premium.
American trailed Delta and United last year in the key metric of revenue per passenger mile flown, called yield, though its yield of 19.93 cents per mile was only barely below United's 20.05 cents per mile.
So far, Leff said, American has grabbed low-hanging fruit to make lots of quick changes.
"I think the open question is going to be, when we move beyond the inexpensive, quick wins to the more systemic kinds of questions, what types of decisions are they going to make," Leff said.
For example, will American decide to retrofit more of its existing widebody fleet with the new Dreamliner interiors? So far, 20 Boeing 777-300ERs are planned for the refit.
Delta's rise to being the clear leader in the U.S. corporate travel market, Leff said, has been a project 15 years in the making. And along with product and service upgrades, building a reliable operation -- an area American still struggles with -- has been a key reason for Delta's success.
"We are at the beginning of announcements for American on how they could be pivoting to be more premium and customer-friendly," Leff said. "But the runway for that will be very long. It will be a long time before we know if they stick to it."